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Survey: American Business Leaders Say US Economy to Get Worse

Some of Americas most powerful business leaders think the U.S. economy will get worse, maybe much worse, before it gets better.

A quarterly survey of chief executive officers finds their confidence has plummeted to a six-year low, and that 71 percent expect their companies will have to lay off workers in the next six months.

It also finds executive officers expect the U.S. economy to shrink by almost two percent this year.

The Business Roundtable surveyed top executives who represent a combined work force of nearly 10 million people and more than $5 trillion in yearly revenues.

In contrast, a poll by The New York Times newspaper and CBS News finds Americans are getting somewhat more optimistic about the economy.

The poll finds 20 percent think the economy is getting better, compared to seven percent in mid-January, while the percentage of Americans who think the country is headed in the right direction is also up to 39 percent from 15 percent in mid-January.

Still, 70 percent of the poll's respondents said they are worried that they or another family member will lose their job. And 31 percent say they have cut back on spending for both luxuries and necessities.

An indication of those cutbacks came Tuesday from the Federal Reserve, U.S. central bank. The Fed said consumer borrowing dropped from January to February by $7.5 billion, after increasing the month before.

Business Roundtable Chairman Harold McGraw III, who is also the president and chief executive of The McGraw-Hill Companies, a publishing giant, says it will take more time for the U.S. government's economic policies to have an impact. But he says the efforts have started to restore confidence in the financial markets, which he called "a critical first step."

The top official at one of the country's largest investment firms is calling for changes to the way financial firms pay their top officials. Goldman Sachs chief executive Lloyd Blankfein told a group of investors Tuesday that the industry needs to "apply basic standards to how we compensate people."

Blankfein recommended a system that includes a yearly salary and additional pay that is based on the success or struggles of the company.